How Do You Buy A Home in a Seller’s Market?
person CondoGo | watch_later 2021-12-31
How Do You Buy A Home in a Seller’s Market?

In a seller’s market, there are more buyers than there are homes for sale. With fewer listings to choose from and more competition, homes typically sell quickly, often seeing multiple offers or even bidding wars, and selling over asking price.

What is a seller’s market?

In a seller’s market, there are more buyers than there are homes for sale. With fewer listings to choose from and more competition, homes typically sell quickly, often seeing multiple offers or even bidding wars, and selling over asking price. In a seller’s market, the seller has the upper hand. This is not the time to test your low-ball offer skills.

In a buyer’s market, there are more homes for sale than there are buyers. Since there is less competition, buyers can take their time shopping the market and have more negotiating power. The price of homes listed for sale can be stable or falling.

In a balanced marketthere is an equal number of buyers and sellers, resulting in reasonable offers and average days on market. Less tension between buyers and sellers’ results in stable home prices.

How do you buy a home in a seller’s market?

Having a handle on market conditions is a key first step in a successful transaction. This is the case regardless of market conditions, but especially if you’re trying to buy a home in a seller’s market. Remember, real estate is very local, so what is happening in one neighbourhood may not be the case in another. Here’s where it helps to tap into a professional, experienced real estate agent for advice and services best suited to your needs.

Planning to buy a home?

Before you start looking, it's important to know your budget. How much you can afford will depend on how much you'll need to spend on a monthly mortgage payment, as well as how much you plan to spend on taxes, insurance, repairs and other costs associated with buying property. If you want to buy a home that's more expensive or in a different location than where you currently live, you will likely either need to make some lifestyle changes or save up more money before making an offer on the property.

Get a mortgage pre-approval

Get pre-approved for a mortgage—this lets you know how much your lender is willing to lend and gives you an idea of how much you can spend. It also locks in the current interest rate for up to 120 days, so you can shop with the peace of mind that you’re insulated from rate hikes in the near future. If the rate drops, your lender should honour the new lower mortgage rate when you’re ready to make your purchase.

Be Prepared to act fast

It’s crucial to be prepared for a home purchase. If you’re hoping to find a property in a seller’s market, you’ll need to act fast when you find a place that interests you.

Make a strong offer

In a seller’s market, you may only get one chance— and it’s not always about the money. A real estate transaction can be complicated with a lot of moving parts. If all other things are equal between your offer and someone else’s, one that’s tailored to the seller’s needs (such as a short or long closing) can tip the scales in your favour. Aside from conceding to the seller’s wishes, an offer in a seller’s market should have as few conditions as possible. A conditional offer means that certain terms must be met in order for the offer to be valid. Some common conditions include:

Conditional on financing

This is a common condition for first-time homebuyers. A buyer has a few days to get this, and the process will include a home appraisal. If the lender does not agree to finance the property, the buyer will notify the seller and the offer becomes null and void.

Conditional on home inspection

A home is the biggest purchase most people make in their lifetime. To ensure that the house is in good condition, a home inspection is generally recommended before the deal can go through. If it isn’t up to par, the buyer can return to the seller and request repairs, a reduction in the price, or can rescind the offer entirely.

Conditional on the sale of a home

 If a prospective homebuyer already owns a home, he or she may want to ensure that it is sold before agreeing to purchase a new property.

Offer conditions aren’t ideal for the seller, as each one has a potential domino effect. But buyer beware! You may be tempted to remove the “conditional on financing” or home inspection condition in an effort to beat the competition. For your own protection, we recommend keeping these as part of your offer.

ou might already know this as a key survival strategy in a buyer’s or seller’s market. And if you're hoping to buy a home, you'll need to stay flexible. Market conditions can change at any time -- so have a backup plan ready, in case you need to delay the purchase -- or need to jump on the opportunity sooner than expected!

Working with a professional

Working with a professional can also bring you peace of mind, as it will likely result in a smoother transaction and a happier home for you. Working with an experienced agent can ease much of the stress associated with finding and buying a home in seller’s market. Some advantages include:

better access to homes in and out of the local market.

knowledge of neighbourhoods and market conditions.

negotiating skills (not usually a factor in a seller’s market, but good to have in your back pocket!)

they handle the paperwork – enough said.

guidance and support in the biggest buying decision of your life.

Don’t take rejection personally

Instead, learn from the experience and keep trying. Many buyers are frustrated when they submit offers to sellers who have lived in their homes for a long time and are hesitant to relinquish it. Working with a real estate agent can help you see new listings as soon as they hit the market, so you can jump on “the one” when you find it.

When you work with CondoGo real estate Agents

You can expect a full-service experience from beginning to end. The technologies we use for your search and throughout the home-shopping process enable us to manage your search and communicate clearly in an ever-changing real estate environment. Whether you’re making your first home purchase or moving again, our team is here to help ensure that buying or selling a home is one of the most enjoyable experiences of your life.